THE COMMERCIAL BANK OF QATAR · 2015. 4. 29. · Commercial Bank of Qatar – Financial Results – Quarter 1 2015 – (Investor Presentation – 27.04.2015) Consolidated Profitability

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Commercial Bank of Qatar – Financial Results – Quarter 1 2015 – (Investor Presentation – 27.04.2015)

THE COMMERCIAL BANK OF QATAR

Financial Results For the Quarter Ended 31 March 2015 27th April 2015















Commercial Bank of Qatar – Financial Results – Quarter 1 2015 – (Investor Presentation – 27.04.2015) 2

Forward Looking Statements

• This presentation and subsequent discussion may contain certain forward-looking statements with respect

to certain plans and current goals and expectations of Commercial Bank and its associated companies

relating to their future financial condition and performance. These forward-looking statements do not

relate only to historical or current facts but also represent Commercial Bank’s expectations and beliefs

concerning future events. By their nature forward-looking statements involve known and unknown risks

and uncertainty because they relate to future events and circumstances including a number of factors

which are beyond Commercial Bank’s control. As a result, Commercial Bank’s actual future results or

performance may differ materially from the plans, goals and expectations expressed or implied in such

statements.

• Any forward-looking statements made by or on behalf of Commercial Bank speak only as of the date they

are made. Commercial Bank does not undertake to update forward-looking statements to reflect any

changes in Commercial Bank’s expectations with regard thereto or any changes in events, conditions or

circumstances on which any such statement is based. The information, statements and opinions

contained in this presentation do not constitute a public offer under any applicable legislation or an offer

to sell or solicitation of an offer to buy any securities or financial instruments or any advice or

recommendation with respect to such securities or other financial instruments.
















CONSOLIDATED HIGHLIGHTS AND PERFORMANCE

COMMERCIAL BANK FINANCIAL PERFORMANCE

SUBSIDIARIES AND ASSOCIATES’ FINANCIAL PERFORMANCE

OUTLOOK
















Summary Net profit (QAR million)

1,635 1,884 2,012

1,605 1,940

548 463

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Net operating income

33,567 41,712

48,594

66,863 72,541

68,687 71,944

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

31% 32% 37% 36% 34%

34% 34%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Non-interest income

Net interest income

Non-interest income to net operating income (%)

Loans and advances to customers (QAR million)

4

Consolidated Highlights – Quarter Ended 31 March 2015

Financial results

− Q1 15 net profit QAR 463m; up 20% up v Q4 14 − Q1 15 net profit down 16% v Q1 14 due to higher provisioning − However, operating profit up 4% vs Q1 14

− Net Interest Income up 1% to QAR 625.5 m − Fees & Other Income up 4% to QAR 326.7 m

− Operating Income up 2% at QAR 952 m − Total Assets up 2% to QAR116 bn − NPL ratio up to 3.9% − Cost to Income Ratio down to 38.1% v Q1 14 39.6% − Associates’ profitability up 8.5% to QAR 99.5 m

Expansion and active management of balance sheet

− Lending up 5% to QAR 71.9 bn − Total assets up 2% to QAR 116 bn − NIM stable at 2.6%

Strong capital base maintained (as at 31 March 2015)

− CET1 under Basel III of 11% − CAR under Basel III of 14.7%
















Consolidated Profitability Consolidated Balance Sheet

Performance Ratios Capital

5

Consolidated Financial Performance – Quarter Ended 31 March 2015

QAR Million 31.3.15 31.3.14 %

Net interest income 626 621 0.8%

Non-interest income 327 315 3.7%

Total costs 401 407 (1.6%)

Net provisions 176 59 (198%)

Associates’ income 99 92 8.5%

Net profit 463 548 (15.7%)

QAR Million Q1 2015 31.3.14 31.3.14

Total assets 116,122 114,019 1.8%

Loan & advances 71,944 68,687 4.7%

Financial investments 12,497 14,939 (16.1%)

Customers’ deposits 61,747 62,124 (0.6%)

Total equity 16,894 16,628 1.5%

QAR Million 31.3.15 31.3.14

RWA (QAR million) 99,219 95,541

Tier 1 ratio (Basel III) 13.1% 12.8%

Total Capital ratio (Basel III) 14.7% 15.1%

31.3.15 31.3.14

ROAE 10.7% 13.2%

ROAA 1.6% 1.9%

NIM 2.6% 2.6%
















Profitability Net interest margin

Net operating income Cost to income ratio

29.0% 28.5%

31.7%

38.2% 37.8% 39.6%

38.1%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015Income includes share of profit of associates

3.7% 3.5%

3.0% 2.7% 2.7% 2.6% 2.6%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015Net interest income as a % of average interest earning assets, including (i) loans and advances to customers, (ii) bonds and (iii) loans to other credit institutions

Net interest income up 0.8% to QAR 625.5m v same period last year

NIM stable at 2.6%

Non-interest income up 3.7% to QAR 326.7m v Q1 2014

Net fee income up 7.6% to QAR 227.6m

Foreign exchange income down 10% to QAR 38m

Investment income down 47% to QAR 30.2m

Cost to income ratio lower at 38% v 40% in Q1 2014.

6

Earnings Performance – Quarter Ended 31 March 2015

31% 32% 37% 36% 34% 34% 34%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Non-interest income

Net interest income

Non-interest income to net operating income (%)
















2010 2011 2012 2013 2014 Q1 14 Q1 15

Due to Banks and Financial Institutions

Customers' deposits

Other Borrowed Funds

Other Liabilities

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Others

Investment in Associates

Securities

Liquid Assets

Loans

Summary Assets mix

Liabilities mix

Total assets increased by 1.8% to QAR 116.1bn v Q1 14

Lending to customers up 4.7% to QAR 71.9bn

Due from banks up 17.7% to QAR 15.3bn

Total liabilities increased QAR 1.8bn to QAR 99.2bn v Q1 14

Inter-bank takings up 15.1% to QAR 14.7bn

Other borrowings up 7.5% to QAR 9.7bn

50.0 57.4

16%

58%

17%

3% 71.5

5%

65.1

113.1

5%

4%

19%

13%

59%

96.6

61%

14%

5% 4%

80.0

16%

7

Balance Sheet Structure – Quarter Ended 31 March 2015

13% 15% 12% 7%

67% 66% 64%

19%

19% 19%

24%

4%

3%

2% 3%

98.0

13%

66%

19%

3%

14%

63%

14%

63%

18%

54%

21%

6%

3%

62.5

16%

63%

10%

19%

4%

115.7

4%

13%

64%

19%

4%

97.5

60%

18%

13%

4%

5%

114.0 116.1

4%

4%

19%

11%

62%

4%

99.2
















Corporate 76%

Retail 24%

Summary Loan book breakdown by division

Qatari banks credit facilities breakdown by sector – Mar 2015 Loan book breakdown by sector – Mar 2015

Loans to customers at QAR 71.9bn, up 4.7% v Q1 14

Growth mainly in retail, services, government and commercial sectors

Loan book diversified across industry sectors

Corporate customers represent 76% of total loan book

Source: QCB

8

Loan Book Breakdown – 31 March 2015

Consumption 15%

Real Estate 14%

Services 10%

Commercial 7% Contracting

5%

Gov. & Semi- Gov. Agencies

34%

Other 2%

Industry 2%

Outside Qatar 11%

Market total: QAR 676bn CB at 9.0%

Consumption, 11%

Real Estate, 27%

Services, 14% Commercial,

12% Contracting, 8%

Gov. & Semi-Gov. Agencies,

12%

Others, 11%

Industry, 6%
















192 213 297 408 314 435 316 325

2,199 2,419

2,182 2,453

1.20% 1.09%

3.65% 3.79% 3.55%

3.89%

2011 2012 2013 2014 Q1 14 Q1 15

Retail Corporate Gross NPLs / Gross Loans

648 806 925 1,316 1,709 1,316 1,749

2.0% 2.0% 2.0%

2.5% 2.5% 2.5% 2.5%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Risk Reserve Coverage

Summary Loan coverage ratio

Non-performing loan (‘NPL’) ratio (90 day basis) Risk reserve (QAR million)

Net Provision for loan loss of QAR 170m v QAR 51m in Q1 14

Comprising QAR 31m for Retail;

QAR 105m for Wholesale;

QAR 34m for ABank

NPL ratio 3.89% at Q1 15 v 3.8% at Q4 14

Loan coverage at 76.8% v 74.3% at Q4 14

Risk reserve of QAR 1.7bn; total loan loss coverage of 137%

89.7%

107.8% 116.3%

63.0% 74.3%

65.2% 76.8%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Risk reserve ratio represents risk reserve over total loans & advances net of specific provisions, IIS, deferred profits of IB, lending to MOF and cash collateral

9

Asset Quality – 31 March 2015
















4,000 6,230 7,891 14,706 11,621 14,939 12,498

6,024

5,503 3,214

16% 16%

14%

13%

10%

13%

11%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Available for Sale Held to Maturity % of Total Assets

Equities 4%

Government Bonds & QCB

T-Bills 81%

Investment Funds

3%

Other Debt Securities

12%

128

68 62

110

50

8 6

2010 2011 2012 2013 2014 Q1 14 Q1 15

Summary Investment portfolio – 31 March 2015

Investment portfolio evolution (QAR million) Investment portfolio provisions (QAR million)

Investment portfolio down 16% to QAR 12.5bn v Q1 14

Due to maturities and sale of Government Bonds.

81% Government Bonds and QCB T-Bills

Investment income of QAR 30m Q1 15 v QAR 21m in Q1 14

Investment provisions of QAR 6m Q1 15 v QAR 8m in Q1 14

10

Investment Portfolio – 31 March 2015
















53%

15%

13%

16% 3% Customers' Deposits

Total Equity

Due to Banks andFinancial Institutions

Debt Securities

Other Liabilities

Summary Total funding mix – 31 March 2015

Debt issued and other borrowed funds Commercial Bank credit ratings

Customers’ deposits down 0.6% to QAR 61.7bn v Q1 14 representing 53% of the total funding base

Well diversified funding mix

Total equity represents 15% of funding mix

Fitch upgraded the long term IDR to A+ in March 15 from A.

QAR Million 31.3. 2015

31.3. 2014

Subordinated Note (Fixed Rate due Nov 2019) 2,664 2,694

EMTN (Bond) ( Fixed Rate due Apr 2017) 1,807 1,802

EMTN (Bond) (Fixed Rate due Jun 2019) 2,709 0

Swiss Franc note (Fixed Rate due Dec 2015) 1,050 1,157

Senior Notes 1,033 3,789

Bilateral/club loans 9,768 9,081

Total 19,031 18,522

Rating Agency

Foreign Currency Bank Deposits/IDR

Bank Financial Strength/ Individual

Outlook Date

LT ST

Moody’s A1 Prime- 1 C- Stable Sep 14

Fitch A+ F1 bbb Stable March 15

S&P A- A-2 - Negative May 14

Funding Breakdown – 31 March 2015
















2010 2011 2012 2013 2014 Q1 14 Q1 15

Time Deposits

Savings Deposits

Demand & Call Deposits

Summary Customers’ deposits (QAR million)

Qatari banks deposits breakdown by sector – Q1 2015 Deposits by customer type – Q1 2015

Customers’ deposits decreased by 0.6% to QAR 61.7bn

v Q1 14

Good deposit mix with Government and Semi-

Government at 25%, corporate at 43%, and individuals

at 32%.

Corporate 61%

Individuals 19%

Non Resident 10%

Government 10%

Market total: QR 620bn CB at 8.6%

33,281 37,989

Source: QCB

41,386

63,420

12

Deposit Breakdown – 31 March 2015

61,561 61,747 62,124

Corporate 43%

Individuals 32%

Gov. & Semi-Gov. Agencies

12%

Government 13%
















16.7% 16.4% 15.4%

12.6% 13.1% 12.8% 13.0%

18.5% 17.9% 17.0%

14.1% 15.2% 15.1% 14.7%

2010 2011 2012 2013 2014 Q1 14 Q1 15Tier 1 Total Ratio

12,500 14,230 14,939

16,555 17,696

16,628 16,895

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

7 6 6

2 3.5

2

1

2010 2011 2012 2013 2014

Cash dividend Bonus shares

Summary Total equity (QAR million)

Dividend distribution per share (QAR) Capital Adequacy Ratio

Total equity at QAR 16.9bn, down QAR 0.8bn from Q4 14, due to:

Q1 15 profit of QAR 0.5bn

2014 dividend payment of QAR 1.0bn

Reduction in foreign currency translation reserve of QAR 0.2bn

Capital Adequacy Ratio at 14.7% (Basel III)

QCB minimum

requirement of 10% (Basel

II) & 12.5% (Basel III)

13

Capitalization Levels – 31 March 2015

Basel III Basel II



















OUTLOOK
















Profitability Balance Sheet

Performance Ratios Capital

15

Commercial Bank Financial Performance – Quarter Ended 31 March 2015

QAR Million Q1 2015 Q1 2014 %

Net interest income 477 481 (0.8%)

Non-interest income 283 271 4.4%

Total costs 298 294 1.4%

Net provisions 139 58 (139%)

Net profit 422 493 (14.4%)

QAR Million 31.3.15 31.3.14 %

Total assets 100,151 96,616 3.7%

Loan & advances 59,550 55,935 6.5%

Financial investments 13,279 13,968 (5%)

Customers’ deposits 53,503 53,394 0.2%

Total equity 16,702 16,254 2.7%

QAR Million 31.3.15 31.3.14

RWA (QAR million) 82,576 77,172

Tier 1 ratio (Basel III) 13.8% 13.6%

Total Capital ratio (Basel III) 15.4% 15.8%

31.3.15 31.3.14

ROAE 12.3% 12.1%

ROAA 1.5% 2.1%

NIM 2.3% 2.5%



















OUTLOOK
















27.7 28.3

81 53

139

34 27

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Net Profit

Alternatifbank of Turkey (ABank)

Net profit after tax at TL 27m v TL 34m in Q1 14

Operating income up by TL 18m v Q1 14

Operating expenses stay stable at TL 69m

Provisions up by TL 24m compared to Q1 14

Loan book up to TL 8.5bn v TL 7.1bn in Q1 14

Customers’ deposits up to TL 5.8bn v TL 5bn in Q1 14

Net Profit ( TL million)

Net operating income (TL million)

12% 14%

12% 24% 25%

24% 23%

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Non-interest income

Net interest income

TL million Q1 2015 Q1 2014

Operating Income 130 112 Total Operating Expenses 69 69 Total Provisions 25 1 Profit before tax 35 42 Tax 8 8 Net Profit 27 34

Profitability

Balance Sheet

TL million 31.3. 2015

31.3. 2014

Assets

Cash and Balances with Central Bank 1,514 1,107

Loans and advances to customers 8,564 7,138

Due from Banks 889 66

Total Investments 851 1,770

Other Assets 599 811

Total Assets 12,417 10,892

Liabilities

Customers' deposit 5,828 5,058

Other borrowed funds 3,973 2,662

Due to Banks 1,114 1,697

Other Liabilities 509 666

Shareholders Equity 993 809

Total Liabilities and Shareholders’ equity 12,417 10,892

17

ABank Results – Quarter Ended 31 March 2015
















490 581

765

1,039

1,373

327 352 308 330 410

552 605

161 161

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Operating Income Profit

78

92 99

104 114

26 32

27 34

41 41 50

10 13

2010 2011 2012 2013 2014 Q1 2014 Q1 2015

Operating Income

Profit

National Bank of Oman (NBO) NBO Performance (OMR million)

United Arab Bank (UAB) UAB Performance (AED million)

Net profit after tax at OMR 12.6m, up 22.4% from OMR 10.3m in Q1 14

Net operating income OMR 31.5m, up 19.6% from OMR 26.3m in Q1 14

Net interest income up 17.2% to OMR 22.4m Non-interest income up 26% OMR 9m

Net provisions up 34.5% at OMR 2.6m

Loan book grew 14.2% to OMR 2.4bn v Q1 14

Customers’ deposits down 13.8% to OMR 2.4bn v Q1 2014

Net profit of AED 161.5m, up 0.1%, from AED 161.3m in Q1 14

Net operating income up 7.8% to AED 352m v AED 326.5m in Q1 14

Net interest income up 10.2% to AED 264.3m

Non-interest income up 1.1% to AED 87.6m

Provisions increased to AED 84.3m v AED 61.4m in Q1 14

Loan book grew 5.8%, to AED 18.2bn v Q1 14

Customers’ deposits up 11.6% to AED 18.3bn v Q1 14

18

Associates’ Performance – Quarter Ended 31 March 2015



















OUTLOOK
















Summary State of Qatar 2012 – 2015 budgets (QAR billion)

Real GDP growth

Source: EIU Report

178 210 218

28 8 7

206 218 226

2012-2013 2013-2014 2014-2015

Spending Surplus Revenue

2014-2015 v 2013 -2014

•Revenue up 4%

• Surplus down 9%

• Expenditure up 4%

- Education up 7.3%

- Healthcare up 12.5%

- Infrastructure Projects up 21%

Source: IMF, Qatar Budget

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

2013 2014 2015 2016 2017

Rea

l GD

P G

row

th %

Qatar

Turkey

UAE

Oman

World

20

Outlook

CB Strategy

Focus on return on capital Grow market share and cross-sell Optimise yields, attract lower cost funds and manage costs Watching brief on acquisitions

Qatar

Retail: grow market share Wholesale: defend and drive profitability Margin: stabilisation Cost: reduce C/I

Turkey

Creating a challenger banking brand Target SME and retail initially Corporate offering Capture trade and investment flows between GCC and Turkey

Associates

Drive local profitability

Generate regional revenue opportunity
















Thank you

Documents

THE COMMERCIAL BANK OF QATAR · 2015. 4. 29. · Commercial Bank of Qatar – Financial Results – Quarter 1 2015 – (Investor Presentation – 27.04.2015) Consolidated Profitability